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Are Falling Earnings Altering The Investment Case For GSK (LSE:GSK)?

Simply Wall St · 2d ago
  • GSK reported third quarter 2026 sales of £8,887m compared with £8,547m a year earlier, while net income fell to £1,543m from £2,013m and basic EPS from continuing operations slipped to £0.385 from £0.499.
  • Alongside softer profitability, GSK secured accelerated FDA approval for Jemperli in locally advanced rectal cancer and a first in class hepatitis B therapy, plus fresh oncology trial data, highlighting a growing pipeline that is not yet reflected in current earnings.
  • We will look at how GSK's weaker net income despite fresh FDA approvals may influence the wider investment narrative.

Scan beyond GSK and evaluate earnings under pressure by sizing up other healthcare stocks with resilient balance sheets in our hand curated list of solid balance sheet and fundamentals (10 results) for comparison.

GSK Investment Narrative Recap

To stay comfortable as a GSK shareholder, you need to support a story in which a broad vaccines and HIV base funds a heavier push into oncology and specialty medicines, while cost savings protect margins. The latest quarter reflects that tension. Sales for the first nine months reached £24,925m, but net income of £3,715m was well below the prior period, and earnings per share weakened.

The near term swing factor is still execution on late stage assets and on the £1.9b Accelerate Growth savings program, because weaker profitability leaves less room for error as loss of exclusivity approaches. The biggest current risk remains that new oncology, HIV and liver disease products do not scale quickly enough to offset pricing pressure and any future patent related declines. The latest figures do not remove that risk.

The most relevant update here is Jemperli’s accelerated FDA approval for MSI H or dMMR locally advanced rectal cancer, backed by AZUR 1 data. In practical terms, that moves GSK a step further along the path analysts already focus on, which is turning a larger oncology pipeline into meaningful specialty medicines revenue while the broader group absorbs earnings pressure.

For you, Jemperli is best viewed as a live test of that thesis. The approval creates an additional oncology catalyst, but it also raises the execution bar on pricing, access and label expansion at a time when General Medicines faces pressure and one off items are already weighing on reported profit. It slightly reinforces the existing narrative rather than transforming it.

What The GSK Consensus Is Really Asking You To Believe

GSK's narrative projects £37.2b revenue and £7.0b earnings by 2029. This lines up with analysts baking in 3.9% yearly revenue growth and an earnings increase of about £2.2b from £4.8b today.

Uncover why GSK's fair value indicates a 17% potential upside to its current price, before other investors react to the gap.

LSE:GSK 1-Year Stock Price Chart
LSE:GSK 1-Year Stock Price Chart

Exploring Other Perspectives

Some of the most optimistic analysts focus on GSK’s oncology pipeline as the real swing factor rather than today’s weaker net income. Before this week’s earnings, the bullish cohort was pencilling in £40.6b of revenue and £7.8b of earnings by 2029. You can treat those as one possible story and compare it with other viewpoints that may adjust after these approvals and results.

Explore 4 other GSK fair value estimates, including one that suggests as much as 183% upside from the current price!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so trust your own analysis.

Looking for more investment ideas beyond GSK?

If the GSK story has you thinking about portfolio balance, you can widen the field using the Simply Wall St Screener to compare other businesses with very different profiles and risk trade offs.